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View Diary: Socialism — what it isn’t (117 comments)

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  •  What about a progressive tax code? (0+ / 0-)

    A truly steep progressive tax code would essentially resemble socialism. France has a moderately steep one now, do you think highly capable people will go galt there? Do you believe Art Laffer that higher tax rates supposedly reduce GDP? Do you think higher taxes discourage "job creators" from investing? Your argument has a little bit of that slippery slope to it.

    •  The US has on net one of the most progressive tax (3+ / 0-)
      Recommended by:
      coffeetalk, Whatithink, Sparhawk

      Codes in the world.

      When comparing how progressive tax policies are between countries, one needs to consider all the taxes.  There is more to this that the top marginal income tax rate, one needs to look at effective rates.

      To look at how progressive tax codes are, one should compare the share of tax burden paid by the different household income groups, in particular the lowest 20% to the top 20% and the mid 20% to the top 20% for simplicity (more complex measures can also be used).  

      France and the other advanced European economies have their income taxes kick in at lower incomes and very importantly have VATs of about 20% (similar to a national sales tax on most everything).  The net result of these calculations is that the US has a more progressive tax code than these other countries.

      Just to get technical as an economist.  Most people think the tax burden that one has is whatever the taxes they pay.  If you think the burden as how much less you are able to buy as a result of the tax policy, you will see the tax burden more clearly.  A classic example of this is raising the real estate tax on apartment owners.  Their typical response is to raise the rent on their tenants.  To the extent the owners increase the rent the tax is paid by the tenant and the tenant has the tax burden not the apartment owner.  

      Tax businesses that employ people in a country at high levels and the result is the businesses activity and jobs go to other countries.  The investors bear a small burden of this tax, but the resulting unemployed workers in the US have a loss larger than the taxes collected.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Thu Apr 04, 2013 at 03:56:53 PM PDT

      [ Parent ]

      •  The IRS tracks this data (1+ / 0-)
        Recommended by:
        Whatithink
        To look at how progressive tax codes are, one should compare the share of tax burden paid by the different household income groups, in particular the lowest 20% to the top 20% and the mid 20% to the top 20% for simplicity (more complex measures can also be used).  
        The data can be found on a number of websites, such as here.  A very readable version that shows exactly what you are saying is here.
      •  The US is also among the worst.... (0+ / 0-)

        In reduction of after-tax & transfers  income inequality. Taxes may be more progressive, but there is little in other ways to transfer income from the wealthiest to the poorest.

      •  This. (0+ / 0-)
        Just to get technical as an economist.  Most people think the tax burden that one has is whatever the taxes they pay.  If you think the burden as how much less you are able to buy as a result of the tax policy, you will see the tax burden more clearly.
        I would modify this slightly: it's not just how much less you -could- buy, but how much less you -would- buy.

        10% tax on a $15K income?  MASSIVE TAX BURDEN.  You're literally taking food or medicine out of people's mouths, clothes off their back.

        100% tax on all income over, say, $100mil?  VIRTUALLY NO TAX BURDEN.  Almost none of the people with incomes that would hit that point spend anywhere near their income.

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